Gold vs Silver

In the past gold and silver were used as money, and due to the higher value of gold then silver, gold was used more as a store of wealth (savings account/money storage), while silver was used more for day to day transactions (checking account/pocket change). In 1792, the gold to silver price ratio was a fixed number cemented by law in the United States at 15:1. This meant that 1 troy ounce of gold was worth 15 troy ounces of silver. 11 years later a ratio of 15.5:1 was enacted in France, further cementing this generally accepted "natural" ~15:1 ratio between the 2 precious metals.

More recently however this gold/silver price ratio has changed drastically, so much so that during the 20th century the average ratio between the two has been 47:1 (which is on average a more then a 3x decline in silvers value when compared to gold) and at times has even reached extremes of 100:1 for short periods. Today is price ratio is still quite extreme and is currently sitting at ~74:1 as I write this today, which in a sane world makes no sense.

Understand that silver has far more valuable uses then gold does, especially as technology gets more advanced and widely used, technology which more and more heavily rely on silver. Not only does silver have more uses then gold, but it is also becoming more scarce as times goes on, as more and more of it gets used in a plethora of products, and more and more of those products get thrown away with the silver inside them never to be seen again. Meanwhile, the same cannot be said about gold, which over time has not grown in the number of uses much at all, and is almost never thrown away, meaning the supply is constantly growing over time at a static rate, unlike silver.

Historic Gold vs Silver Price Ratio:

Source: http://www.macrotrends.net/1441/gold-to-silver-ratio

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Bitcoin vs Litecoin

Bitcoin was first introduced in early 2009 and since then has risen to the status of the gold standard of cryptocurrencies. Between now and then it has become quite widely accepted, frequently used, and more and more is becoming a household name as it grows in popularity exponentially by the day (#1 Market Cap). Litecoin on the other hand was first introduced more than 2 years later in late 2011, with the openly stated goal of "being the silver to bitcoins gold", and although Litecoin today is also quite popular in the crypto world (#4 Market Cap), much like silver, Litecoin still has yet to shine.

With this, Litecoin was created based on the idea that while Bitcoin may be a good store of value (due to its fairly slow and expensive transactions, seen more as a savings account or store of wealth similar to gold), that the crypto world needed something better, cheaper, faster and more agile which could be more effectively used for basic day to day transactions (faster and cheaper transactions, seen more as a checking account or pocket change similar to silver). Using the gold to silver ratio mentioned above, we can clearly see that an intended “natural" ratio similar to gold/silver should also exists between Bitcoin and Litecoin.

Understand that currently Litecoin is 4x faster then Bitcoin, and has 4x more coins available then Bitcoin, while also having much cheaper fees then Bitcoin does making the intended "natural" Bitcoin/Litecoin ratio of close to 4:1. Well much like the gold/silver ratio (intended 15:1 vs actual 74:1), the Bitcoin/Litecoin ratio (intended 4:1 vs actual 55:1) at the current time is far from natural, and is currently sitting at ~55:1, a far reach from its intended 4:1 "natural" ratio potential. Much like silver, Litecoin also has more real world uses then Bitcoin has, due to the lower transaction fees and quicker transaction times, and in the end Litecoin has more potential to be effectively used in more real world situations then Bitcoin is currently capable of.

Historic Bitcoin Vs Litecoin Fees:

Source: https://bitinfocharts.com/comparison/transactionfees-btc-ltc.html

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With this in mind and the understanding that these artificial/unnatural ratios will not last forever, you may be able to capitalize on the current situation. Fairly soon I fully expect the price ratio between Gold and Silver as well as the price ratio between BTC and LTC to start correcting themselves quite drastically, moving much closer to their natural intended ratios of ~15:1 for gold/silver (which will likely settle more around the 20:1 mark), and ~4:1 for BTC/LTC (which will likely settle more around the ~10:1 mark).

With that being said I do not expect silver/LTC to do all the work and just move up to make this ratio gap close, instead I expect gold/BTC to drop slightly in value while at the same time silver/LTC raise a fair amount in value, effectively closing the price gap from both sides at the same time. From there, the gold/BTC price will likely start to correct itself from the drop and move back up, but with this silver/LTC will follow suit and will likely also grow and continue to slowly close the rest of the natural intended ratio gap over a longer period of time.

Anyways just my 2 cents…

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Disclaimer: I am not a financial advisor, this post should not be seen as financial advice. This is just some information I personally found interesting that didn't seem to be discussed much, so I wanted to make a post about it to share my personal opinion on the matter.